Online travel company Expedia Inc (EXPE: Quote) Thursday agreed to acquire Auto Escape Group, an European online car rental reservation company, from private equity fund Montefiore Investment and certain members of the AutoEscape's management team. The financial terms of the deal were not disclosed.

Expedia said the deal expands its European car rental market presence by adding more than 20 websites and additional choices for consumers.

Expedia said it expects the deal to close in the third quarter of 2014.

Upon closing, Auto Escape will become a part of Expedia's CarRentals.com brand and report into Henrik Kjellberg, President of the Hotwire Group.

"We are excited to expand our CarRentals.com brand internationally so that we can provide our customers more choices across the globe and help our supply partners expand their marketing reach," said Kjellberg.

Founded in 1999, Auto Escape offers leisure customers all-inclusive car hire services via two brands: Auto Escape and Car del Mar. The company has an international reach, ensuring rental car availability with almost 300 suppliers in 125 countries. Auto Escape employs about 15 people in two main offices located in Hamburg, Germany and Pertuis, France.

The deal comes amid fierce competition in the online travel industry. Last year, Expedia and Travelocity joined to share the load on searches, bookings and promotion.

In May, Expedia posted a smaller loss for the first quarter due to a near 19 percent increase in revenues, as more customers sought its sites to book hotel rooms and airline tickets.

Expedia stock closed Thursday at $77.01, down $0.30 or 0.39%, on a volume of 751k shares on the Nasdaq. In after hours, the stock gained $0.64 or 0.83%.